OUR MISSION: To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the resources entrusted to our care.
525 Golden Gate Avenue, 13th Floor
San Francisco, CA 94102
T 415.554.3155
F 415.554.3161
TTY 415.554.3488
Date: March 12, 2024
To: Tim Paulson, President
Anthony Rivera, Vice President
Newsha K. Ajami, Commissioner
Sophie Maxwell, Commissioner
Kate H. Stacy, Commissioner
Through: Dennis J. Herrera, General Manager
From: Nancy L. Hom, Chief Financial Officer and AGM, Business Services
RE: SFPUC Fiscal Year 2022-23 Annual Comprehensive Financial Report and Popular Annual Financial Report
Financial Services is pleased to present the FY 2022-23 Annual Comprehensive Financial Report (ACFR) issued by MGO, LLP on January 26, 2024 and the FY 2022-23 Popular Annual Financial Report (PAFR) focusing on SFPUC’s “Delivering Reliability Around the Clock”.
The reports can be found on our public-facing website:
https://sfpuc.org/sites/default/files/about-us/policies-reports/ACFR-FY2023.pdf https://sfpuc.org/about-us/reports/popular-annual-financial-reports
The ACFR describes our financial activities, condition, and services as an organization, inclusive of the Water, Wastewater, and Hetch Hetchy Water & Power & CleanPowerSF audited financial statements. The report includes financial and statistical information, inclusive of ten years of financial and operating indicators and trends, social and economic data, and other metrics of interest to the general public and investors. The Government Finance Officers Association (GFOA) has awarded the SFPUC the prestigious Certificate of Achievement in Financial Reporting annually since 2009.
The PAFR is specifically designed to be readily accessible and easily understandable to the general public and interested parties without a background in public finance. This year’s report highlights our agency’s resiliency, reliability, and stewardship in the delivering of utility services to our customers. The SFPUC has received the GFOA Award for Outstanding Achievement in Popular Annual Financial Reporting annually since 2010. The award recognizes our commitment to transparency and increasing public awareness by providing an overview of our financial condition.
We are looking forward to another year of both prestigious awards for fiscal year 2023.
cc: Ronald P. Flynn, Deputy General Manager
Vivian Chen, Deputy Chief Financial Officer
Laura Busch, Deputy Chief Financial Officer
Att: FY 2022-23 Annual Comprehensive Financial Report
FY 2022-23 Popular Annual Financial
Delivering Reliability
Around the Clock
Popular Annual Financial Report
For Fiscal Year Ended June 30, 2023
San Francisco Public Utilities Commission
An Enterprise Department of the City and County of San Francisco, California Annual Report for the Fiscal Year Ended June 30, 2023
1 San Francisco
Public Utilities Commission
(AS OF DATE OF PUBLICATION)
Tim Paulson, PRESIDENT Newsha Ajami, COMMISSIONER Anthony Rivera, VICE PRESIDENT Sophie Maxwell, COMMISSIONER Kate H. Stacy, COMMISSIONER
Contents
3 | Water
5 | Power
7 | Sewer
9 | Community Benefits
11 | Finance
Water
We are the third largest municipal utility in California, serving 2.7 million residential, commercial, and industrial customers in the Bay Area. Approximately one-third of our delivered water goes to retail customers in San Francisco, while wholesale deliveries to 27 suburban agencies in Alameda, Santa Clara, and San Mateo counties comprise the other two-thirds.
Power
For 100 years, we have been generating greenhouse gas-free hydropower as our city’s full-service, publicly owned electric utility. In 2016, we launched CleanPowerSF, a community choice aggregation program, to introduce even more renewable energy from sources like wind and solar to the electric grid. Collectively, the two systems meet more than 70 percent of the electricity demand in San Francisco.
Sewer
We operate and maintain the City's water pollution control plants, pumping stations and collection system to protect public health and the environment. We maintain 1,900 miles of sewer mains and lateral and 27 pump stations that collect sewage and storm water, moving the wastewater to the three treatment plants for treatment and discharge to the San Francisco Bay and Pacific Ocean.
Annual Report for the Fiscal Year Ended June 30, 2023
2 Message from our
General Manager
Dear Customers and Interested Parties,
On behalf of the San Francisco Public Utilities Commission (SFPUC), I am pleased to present our Popular Annual Financial Report for Fiscal Year 2022-2023.
This report shares the SFPUC’s work, accomplishments, and financial position from July 1, 2022 to June 30, 2023 in an easy-to-use format. It offers insight into how public dollars are spent providing essential water, power, and sewer services 24 hours a day, seven days a week. It also showcases some of the accomplishments our dedicated staff have achieved on behalf of our customers, our communities, and the environment.
As our city and region rebound from the COVID-19 pandemic, we face another challenge.
Climate change has been a driving factor in our work, and we are addressing it head on. During the past year, California went from a historic drought to one of the wettest winters on record. Unprecedented storms delivered half the average annual rainfall in just a matter of days in San Francisco. Staff across our agency are committed to effectively managing the challenges that climate change poses to our communities.
Every day, 2.7 million people in the San Francisco Bay Area depend on water we supply. Through a growing portfolio
of power resources, including a new standalone battery- storage project in the Bay Area, both our Hetchy Power
and CleanPowerSF now serve about 75% of the electricity demand in San Francisco. We are making generational
upgrades to our Southeast Treatment Plant, the workhorse of our combined sewer system, while also delivering other major improvements across that system to enhance seismic safety and climate resiliency.
We are proud to provide reliable services and value to our customers by optimizing the operations, maintenance, and improvement of all our assets. Our approach is strategic, long- term, and focused on cost effectiveness.
We have a robust asset management plan in place, while
also continually testing innovative approaches to maximize effectiveness and public investments. Nowhere is the financial health of our agency more evident than when one looks at the improvements we make to our complex infrastructure to ensure the long-term reliability of those vital public assets.
We are also tackling affordability challenges head on. Working to make utility services more affordable for communities that have faced systemic barriers is central to our work.
With a proven track record as a leader in customer affordability, this year we expanded our Customer Assistance Program to provide additional help to low-income customers and those struggling to pay their bills on time. Among the improvements, we increased discounts on water and sewer bills to 40% for customers with very low incomes, exempted low-income
customers from shutoffs or liens for late payment of bills, and ended late fees for residential customers.
Additionally, we successfully advocated for the extension of the state’s relief program for utility debt accrued during the COVID-19 pandemic. Last year the SFPUC secured millions of dollars for customers who accrued pandemic water and sewer utility debt. We are committed to helping those who need it the most. That’s part of what it means to be a utility of the future.
Finally, this year’s report showcases not just our financial health and fiscal responsibility, but our commitment to environmental stewardship and the value of our diverse partnerships.
Even during times of adversity, the SFPUC team has continued to deliver. That will not change.
Thank you to the Commissioners and staff who make the
SFPUC a utility that we can all be proud of.
Dennis J. Herrera,
SFPUC General Manager
Annual Report for the Fiscal Year Ended June 30, 2023
3 Resolute
and Resiliant
Millions of people and businesses
rely on the water the San Francisco
Public Utilities Commission supplies
through our Hetch Hetchy Regional
Water System. The winter of
2022-2023 was an example of
what we can expect from climate
change. Despite unprecedented
wind and rain in every corner of
our watersheds, there were no
interruptions to water or power
deliveries during those historic
winter storms.
Annual Report for the Fiscal Year Ended June 30, 20233
Annual Report for the Fiscal Year Ended June 30, 2023
4 Water Quality and Asset Protection
The SFPUC owns and operates over 1,200 miles of
pipelines in San Francisco, many of which are 100 years old. We continue to maintain and upgrade our critical water system to serve our customers.
The Linear Asset Management Program identifies the
segments of our water network that face the most critical need for replacement, either due to new demand levels,
aging infrastructure, or seismic reliability. This past year along 19th Avenue we installed a new 36-inch main that
greatly improves service for residents of San Francisco’s west side. At the College Hill Reservoir and along Prospect Avenue we installed new seismically resistant pipeline
that reaches as far as City Hall and San Francisco General Hospital. Other projects include residential neighborhoods where existing infrastructure is reaching the end of its expected lifespan.
Hetch Hetchy Risk Management Pilot Projects
To help us plan for the future, the Hetch Hetchy Regional Water System employs a strategy of pilot projects and
initiatives to test concepts for addressing risks, including capital planning and climate change risks, to help ensure reliable service and assets. One example is our Risk
Tool, which establishes a risk framework, assigning
consequence and likelihood-of-failure scores to all existing and candidate capital projects. The results from that have been integrated into the 10-year capital development
process to optimize our future planning efforts.
Water Supply Reliability and Corrosion Control
To keep our water supply safe and operational, we
constantly examine and develop our vast network
of supply lines. They stretch 167 miles from the
O’Shaughnessy Dam through the Central Valley, to our
other reservoirs and facilities in the East Bay, South Bay, and Peninsula before finally reaching San Francisco.
Our Corrosion Control project utilizes basic chemistry to keep our transmission pipelines free from rust. Cathodic protection prevents corrosion from happening to a pipeline and has been installed across dozens of miles of pipeline and continues to be extended to additional sites.
All of our retail and wholesale customers depend on
receiving high-quality potable water without interruption.
The Harry Tracy Water Treatment Plant, for example,
ensures that water deliveries on the Peninsula and in
San Francisco are pure and safe. We recently installed
new underdrains for six of the plant’s 15 filters in order to maintain full capacity. With more reliable drains now installed, we are able to provide up to 140 million gallons a day.
Hetch Hetchy Water Strategic Capital Planning
and Special Projects Department
Unplanned asset failures and natural disasters can put
a strain on the capital program for the Hetch Hetchy
regional system. To help streamline, this year the SFPUC established a Strategic Capital Planning & Special
Projects Department to help address the most significant challenges affecting the SFPUC’s ability to plan, budget, and deliver water and power capital improvements.
Created as a pilot, this new department complements the centralized project delivery teams by being responsible for architecting a comprehensive capital plan that can
be planned, designed, and constructed to meet asset
management needs. The specific focus is on scope,
schedule, and budget, as well as the contracting and
staffing resources required to deliver successful projects.
With many successes already to date, this strategic capital planning group, has allowed Hetch Hetchy Water and Power to address both future and current risks by utilizing a risk- based approach to prioritize capital planning funding, and manage time-sensitive and high-risk projects, including weather-related emergency projects.
Left: Installing new 36-inch (36”) diameter welded steel pipe (WSP) for Potable Emergency Firefighting Water Systems, Right: Harry Tracy Water Treatment Plant (HTWTP), Photos by: Robin Scheswohl
Annual Report for the Fiscal Year Ended June 30, 2023
5 For more than a century, Hetch
Hetchy Power has been generating
reliable, clean, 100% greenhouse
gas-free electricity. The SFPUC
continues to lead the way on
cleaner, greener future.
Creating the
Clean Energy
Future
Annual Report for the Fiscal Year Ended June 30, 20235
Annual Report for the Fiscal Year Ended June 30, 2023
6 Getting Amped Up with EV Charge SF
T
ransportation is the largest source of greenhouse gas
emissions in the United States, and electrifying vehicles is key to reducing their impact on the planet and our
communities. Having reliable electric vehicle charging
infrastructure close to home and work is a major factor in deciding to go with an electric vehicle. That’s where EV Charge SF can help.
This new SFPUC program provides financial incentives
for property owners to install electric vehicle charging infrastructure in new construction, commercial garages, and other projects in San Francisco. Through EV Charge
SF, new residential and commercial buildings can take
advantage of up to $120,000 in financial incentives
to install reliable electric vehicle chargers and related infrastructure.
The Bristol, a new residential development on Yerba
Buena Island, is one of the newest EV Charge SF
customers. The Bristol was able to take advantage of
the new customer program and successfully financed
and installed more than 30 new electric vehicle charging stations in their parking structure.
New electric vehicle
charging projects are underway at several customer
sites, and funding is available for more projects for both CleanPowerSF and Hetch Hetchy Power customers.
Bay Area Battery Storage
Ensuring reliable power service and achieving San
Francisco’s ambitious climate change goals go hand in
hand. This year, the SFPUC’s clean energy procurement
program, CleanPowerSF, signed its first standalone battery storage project contract in the greater San Francisco
Bay Area. Called the Corby Project, the battery storage system allows energy produced in the middle of the day, when solar is abundant and electricity is at its cheapest, to be stored and discharged later at night when electricity is scarcer and costlier to get. Stored energy can also be discharged when demand for electricity is high, like during hot days, contributing to regional power reliability.
This will
help lessen the grid’s reliance on expensive fossil fuels and help reduce costs for CleanPowerSF ratepayers.
Powering Affordable Housing
Hetch Hetchy Power energized over 700 new units of
affordable or public housing this year, helping to ensure that San Franciscans from all walks of life get to benefit from 100% greenhouse gas-free electricity.
To welcome customers into their new homes, the SFPUC
coordinated a series of community town hall events
providing in-language presentations about Hetch Hetchy
Power’s services, billing, and customer programs to help residents get acquainted with their new provider. To
support customers with low or fixed incomes, the SFPUC
was able to enroll eligible customers in discount programs, like the newly revamped Customer Assistance Program,
which provides a 30% monthly bill discount for eligible Hetch Hetchy Power customers.
T
hanks to its reliable service, Hetch Hetchy Power offers a sense of security for customers inside their new homes.
The SFPUC is committed to ensuring that residents in San Francisco continue to receive the benefits of clean, reliable, and affordable public power for generations to come.
Left: Electric vehicle (EV) charging stations, Top right: Hetchy Town Hall, Bottom right: Houses built by Habitat for Humanity with electric vehicle charging stations, Photos by: Robin Scheswohl
Annual Report for the Fiscal Year Ended June 30, 2023
7 San Francisco’s combined sewer
system is a critical part of our city’s
work to protect public health and
coastal water quality. It collects and
treats about 40 billion gallons of
combined wastewater and stormwater
each year. We’re making major
infrastructure investments, but as
climate change brings increasingly
intense storms, it’s important for
residents and businesses to partner
with us to divert more stormwater
and make properties flood resilient.
Storms,
Floodproofing,
and Heroes
Annual Report for the Fiscal Year Ended June 30, 20237
Annual Report for the Fiscal Year Ended June 30, 2023
8 Green Infrastructure Grant Program
One way in which the SFPUC is making our city’s combined sewer system more resilient is through green infrastructure, a set of sustainable stormwater management tools that take advantage of natural processes to capture stormwater and prevent it from overwhelming our sewer system. Examples of green infrastructure include permeable pavement, rain gardens, and rainwater harvesting.
The SFPUC’s Green Infrastructure Grant Program provides funding for the construction of green infrastructure on large, highly impervious properties, such as schools,
parks, and churches. The primary goal of this program is to reduce the amount of stormwater runoff entering the
SFPUC’s sewer system, which reduces the burden on our
sewer system during intense rain events. This program also requires that projects deliver multiple benefits on top of the stormwater management that they provide, including
increased urban greenspace and habitat, neighborhood
beautification, community engagement, and environmental education. In addition to protecting our environment and improving properties in the city, making these upgrades provides the added benefit of receiving a discount on the stormwater portion of a customer’s bill.
Projects to date have included green schoolyards that
integrate nature-play with stormwater management at K-12 schools, new rain gardens and permeable pathways in
public parks, and a rainwater harvesting system at an arts cooperative. Twenty Green Infrastructure Grants have been awarded since the program launched in February 2019.
Nine of these projects totaling $10.9 million were awarded during the fiscal year 2022-2023. When completed, these projects will collectively capture over 14 million gallons of stormwater each year, providing an important buffer for our sewer system in the face of climate change.
Floodproofing Grants Benefits Property Owners
The Floodwater Management Grant Program is for San
Francisco property owners who have experienced flooding during heavy rains. Awarding over $750,000 in grants
since it was launched in 2013, the program provides
funding for eligible applicants who install flood protection on their properties. Some projects include deployable
flood barriers, raised planters that act as flood walls, backflow preventer valves, regrading of driveways to keep flows out, and much more.
The program has undergone improvements over the years
to make it more accessible and equitable to customers.
These include the addition of hardship eligibility criteria that allow eligible grantees to receive upfront payments in lieu of only reimbursements, increased technical
assistance from SFPUC staff to support the design and
delivery of successful projects, and increasing the SFPUC’s cost share up to 100% of eligible costs.
The program saw a dramatic increase this fiscal year in participation, receiving 135 interest forms compared to 31 for the previous fiscal year. This has resulted in 65 site visits and 10 grant applications, more than any year prior. The program team is currently working on additional improvements so the program can continue to support
homeowners in floodproofing their homes and making our
city more resilient to a changing climate.
Celebrating Adopt a Drain Heroes
Launched in 2016, Adopt a Drain is a SFPUC program
that enables San Franciscans to “adopt” one or more of
the city’s 25,000 storm drains/catch basins and pledge
to keep it free of leaves and debris to reduce localized flooding. On the mobile-friendly site at adoptadrain.sfwater. org, users scroll over a map of San Francisco, claim a
storm drain, pledge to care for it, and even give it a name.
The program helps reduce localized flooding by engaging residents and businesses to take an active role in caring for and improving the neighborhood where they live and
work. It also builds a partnership between the SFPUC and community members by enabling residents to take action
to keep local storm drains clear of debris and help keep stormwater flowing smoothly.
Adopt a Drain is also an opportunity to educate the public about the combined sewer system, and the importance of
stormwater management – a top priority for our organization.
To date, there are 6,486 drains adopted by over 4,500
community members. The program is proving popular
with our customers. Over one two-week period stretching from New Year’s Eve 2022 into 2023, the program added
1,859 new drain heroes and 2,317 newly adopted drains.
Left: Temporary sandbag deployment for flooding barrier, Right: Adopt a Drain VIP Volunteer Event at Oceanside Treatment Plant Photos by: Carmen Magana, Robin Scheswohl
Annual Report for the Fiscal Year Ended June 30, 2023
9 Investing in People
and Community
The SFPUC is committed to being a good neighbor
and helping to improve the quality of life in the
diverse communities where we operate.
Diversity, Equity, and Inclusion
The SFPUC hired its first Chief Diversity, Equity, and
Inclusion Officer in July 2023 to lead the development
and implementation of initiatives to advance racial
equity within our organization. This strategic move
underscores SFPUC’s unwavering commitment to
creating and sustaining an inclusive and diverse
workplace. Recognizing the importance of addressing
systemic inequities, we have embarked on a journey
to embed equity into all operations. SFPUC views the
pursuit of racial equity as a moral imperative and an
essential component for sustainable growth and
success. By creating a more inclusive community,
we are fulfilling our social responsibility and enhancing our organizational resilience and adaptability in an
ever-evolving global landscape.
Social Impact Partnership Program
The SFPUC is committed to being a good neighbor to
communities affected by our contracts, projects, and
operations, and our Social Impact Partnership Program
allows private contractors we work with to do the same.
This past year this impactful program was strengthened
and codified into local law with unanimous support from the SFPUC Commission, the San Francisco Board of
Supervisors, and Mayor London Breed.
The program invites companies competing for SFPUC
qualifying contracts to voluntarily submit a proposal
detailing how they would deliver commitments as either
volunteer hours and/or financial contributions in the
areas of job exposure, awareness, and internships; small business; education; and environmental and community
health. If awarded a contract, contractors are then
committed to providing those benefits to the community.
M aking a difference for more than a decade, the program has led to deep, meaningful, and positive benefits in
communities in San Francisco and across our service
territory. It has brought more technology into San
Francisco public schools; created science, technology,
engineering, and math career awareness opportunities
for K-12 students; and supported a construction pre-
apprenticeship program for women in the trades.
There are currently over 90 contracts where companies
have voluntarily committed to deliver volunteer hours
and financial contributions to local public schools and nonprofit organizations.
With the legislation this year,
the program now has even stronger tools to maximize
transparency and effectiveness. As we invest
in our
systems, we invest in our communities.
Support for Low-Income Customers
Recovering from the economic hardships wrought by the
global pandemic has been hardest on those who can
least afford it. That’s why the SFPUC continued to take groundbreaking steps this fiscal year to provide support to our customers who need it the most.
There were three major accomplishments on this front:
expanding our discount program for low-income customers, instituting a new shutoff avoidance policy that keeps utility service on for low-income customers who are behind on
their bills, and securing additional state funding for debt forgiveness to provide customers relief on past-due bills.
In spring of 2023, the SFPUC approved an expansion of
the Customer Assistance Program, deepening water and
sewer discounts for residential customers in most need
of financial assistance. The SFPUC has long been a leader in ratepayer affordability. We launched our Customer
Assistance Program for residential customers in 2004
Annual Report for the Fiscal Year Ended June 30, 20239
Annual Report for the Fiscal Year Ended June 30, 2023
10 and it has improved and expanded over the years.
We also approved a policy to exempt very low-income
customers and those with certain extenuating
circumstances from facing a shutoff or lien if behind
on their bill.
The SFPUC is also working closely with the State of
California regarding funding recently made available to address historic customer arrearages accrued through
the end of 2022 – a win for public utilities and for
customers in need of assistance across the state.
Conservation Success
Creating partnerships with the San Francisco Giants,
San Francisco International Airport and Golden Gate
Restaurant Association helped the SFPUC exceed our
water conservation goals in the face of a historic drought.
Undertaking joint conservation outreach campaigns
with these high-profile partners allowed us to reach
new audiences as part of a multilingual, regional water conservation outreach campaign.
Outreach methods included electronic billboards along
major highways in the Bay Area, restaurant tabletop signage inviting people to request water if needed, advertising on BART stations and trains, as well as a sophisticated digital marketing campaign with ads on Google, Facebook, Twitter, and Spotify. Tailored campaigns focused on Spanish,
Cantonese, and Filipino speakers.
The San Francisco Giants partnership was a high-profile campaign that included a water conservation trivia
and a prize wheel at select home games that allowed
SFPUC staff to have more than 2,000 direct educational
interactions with Giants fans. Other program features
included in-game announcements, social media posts
from Major League Baseball’s San Francisco Giants and
Oracle Park accounts, Spanish-language ads on Gigantes
Radio, and a public service announcement featuring
Giants mascot Lou Seal.
The campaign continued our strong track record of
environmental stewardship. Overall, this outreach
generated a five-fold increase in visits to our water
conservation web pages, tripled the amount of water
conservation devices distributed, and generated more
than 80 million impressions on social media. The goal
was a 11% reduction in water use across our system,
which serves four Bay Area counties. The result was a
12% reduction in water use systemwide.
Southeast Communities Partnership
In October 2022 the new state-of-the-art Southeast
Community Center opened in the heart of the Bayview-
Hunters Point neighborhood. Drawing 700 community
members to the grand opening event, the center is a
partnership between the SFPUC and San Francisco’s
southeast communities. Tenant partners in the center
provide key services to the community, including in
the areas of health, youth development, financial
empowerment, workforce skill development, family
support, high school and GED programs, economic
development, and entrepreneurship.
This vital neighborhood hub features an expanded low-
cost childcare center, free Wi-Fi, co-working spaces, an on-site café, more than 30 works of art from local artists, nonprofit workspaces, community meeting rooms, large
multi-purpose rooms, and a stand-alone Alex Pitcher
Pavilion for community events. The open spaces include
an amphitheater, gardens, outdoor dining areas, and play spaces for children. From June to November, the center
hosts a farmers’ market featuring local fresh produce and baked goods. As of June 2023, more than 25,000 people
had visited the center and more than 640 events had been held there, from quinceañeras to graduation celebrations.
T
his major investment created a key neighborhood asset
that will provide valuable services and resources for
decades to come.
Left: Jobs Training and Opportunities Program (JTOP), Top right: Southeast Wastewater Treatment Plant (SEP), Headworks Facility Project: Women in Construction week, Bottom right: Southeast Community Center, Photos by: Robin Scheswohl, Sabrina Wong Annual Report for the Fiscal Year Ended June 30, 2023
11 Single-Family Residential FY 2022-23
Average Monthly Usage (ccf) . . ............................................. 4.60 Average Monthly Bill......................................................... $129.30 Cost per Person per Day ................................................... $1.88 Total Cost per Gallon ........................................................ $0.038 Total Combined Bill as % of San Francisco Median Household Income ......... 1.57% Total Combined Bill as % of San Francisco Low Income Household . ............ 3.81% Keeping Our Water Rates Affordable
Calculation is based on the average monthly water usage Average Water/Sewer Bill as % of Typical Household (40th Percentile) Income Average Water/Sewer Bill as % of Low-Income Household (20th Percentile) Income Since 2010, this report has won the prestigious
“Award for Outstanding Achievement in Popular Annual
Financial Reporting” from the Government Finance
Officers Association.
This award recognizes our commitment to increase public awareness by providing an overview of our financial
condition. The financial information for this report is drawn from the audited financial statements in the SFPUC’s
Fiscal Year 2023 Annual Comprehensive Financial
Report (ACFR), using the full accrual basis of accounting and providing complete financial information and
disclosures in conformance with generally accepted
accounting principles (GAAP). PAFR is not audited and
is presented on a non-GAAP basis as note disclosures
have been excluded in the report. Our ACFR, which
provides complete financial information and disclosures in conformance with GAAP, is available online at
http://www.sfpuc.org/about-us/reports.
Financial
Performance
Government Finance Officers Association
Award for
Outstanding
Achievement in
Popular Annual
Financial Reporting
Presented to
City and County of San Francisco
Public Utilities Commission
California
For its Annual Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
Annual Report for the Fiscal Year Ended June 30, 2023
12 The Comparative Consolidated Net Position provide
information about the nature and amount of resources and obligations at a specific point in time. SFPUC continued to reflect a strong and healthy financial condition over the last several fiscal years. Investments in capital assets constituted 78% of our net position and represented
the amount by which the carrying value of capital
assets exceeds capital-related debt, which comprises
the outstanding balances of bonds, commercial paper,
notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.
For FY2023, SFPUC net position increased by 6% or $177
million as compared to FY2022, mainly due to increase in unrestricted and net investment in capital assets.
T
here are five components in the Statement of Net
Position, which is intended to present what the entity owns (assets), owes (liabilities) and its residual or net position.
1. Assets are resources with present service capacity that the government presently owns or controls.
2. Deferred outflow of resources is a consumption of net assets by the government that is applicable to a future reporting period—for example, amortization of refunding loss to future periods.
3. Liabilities are present obligations to sacrifice resources that the government has little or no discretion to avoid, such as debts owed, and represent claims against assets.
4. Deferred inflow of resources is an acquisition of net assets by the government that is applicable to a future reporting period—for example, amortization of net
difference in pension projected verses actual earnings.
5. Net position is the residual of all elements presented in a Statement of Net Position, i.e., Total assets plus deferred outflows minus total liabilities minus deferred inflows Over time, increases or decreases in net position may serve
as a useful indicator of whether the financial position is improving or worsening.
T
he Comparative Revenues and Expenses reflected
continued revenue growth. SFPUC strives to achieve strong financial performance and effectively controls its operating costs to not exceed revenues.
Total revenues, transfers in and contributions increased by $224 million when compared to prior year. This is mainly due to higher charges for services attributed to an average rate increase of 15.9% for water wholesale customers and
1.1% increased electricity consumptions for CleanPowerSF.
Total expenses and transfers out increased by $133
million, as compared to prior year. This was primarily due to higher pension expense based on actuarial estimates, higher interest expense due to increased outstanding bond principal balance, and electricity purchased.
Definitions
• C apital Assets: Include depreciable, amortizable, non- amortizable and non-depreciable facilities and buildings, improvement, machinery and equipment, intangible
assets, land and rights-of-way as well as construction work in progress, net of depreciation and amortization.
•
C
urrent and Other Assets: Assets easily converted to
cash or consumed within one year: cash, investments,
receivables, and prepaid expenses.
•
L
ong-term Debt Outstanding: Payments due on debt
that are more than 12 months in the future.
• C
urrent Liabilities: Payments due on obligations owed
by SFPUC within the next 12 months.
• Ne
t Position: Net difference between assets and
deferred outflows of resources, and liabilities and
deferred inflows of resources.
•
C
hange in Net Position: The total of net income
(loss), net of transfers, and cumulative effect of
accounting change.
•
De
preciation and Amortization Expense: Depreciation
spreads out the cost of a tangible asset over its useful life, and amortization is the deduction of intangible
assets over a specified time period; typically the life of an asset.
•
I
ncome (Loss): The difference between total revenues
less total expenses.
• N
on-operating Revenues and Expenses: Revenues and
expenses that are incidental to SFPUC’s main purpose
and derived from activities not directly related to
SFPUC’s operations such as: license fees and penalties, interest earnings and costs associated with debt.
•
O
perating Expenses: Expenses incurred in the provision
of water, sewer, and power services
• O
perating Revenues: Revenues for the sale of water,
sewer, and power services to customers, services,
inspections, and programs provided by SFPUC.
•
T
ransfers in: Funds recovered from other city
departments to support various programs and projects.
• T
ransfers out: Funds provided to other city departments
to support various programs and projects.
Annual Report for the Fiscal Year Ended June 30, 2023
13 A Closer Look at the Numbers
SFPUC 2023 By the Numbers
Miles .......................................... 1,719 miles of water mains | 1,131 miles of collection system pipes Millions of gallons (MG) .......................... 264,116 MG water reservoir storage | 64,446 MG water production | 62,227 MG water consumption
Millions of gallons per day (MGD) .................. 171.3 MGD water consumption | 85.2 MGD sewer treatment San Francisco Population ......................... 798,206 San Francisco Personal Income per Capita .......... $169,758 SFPUC Website .................................. sfpuc.org SFPUC Assets (DOLLARS IN MILLIONS)
Fiscal Year FY2023
Restated
FY2022^ FY2021
2023-22
$ Change
2022-21
$ Change
C a s h & I n v e s t m e n t s........................................ $ 1,448 1,225 1,287 223 (62) Charges for Services Receivables (net of allowance for doubtful accounts). 159 162 137 (3) 25 C a p i t a l A s s e t s ............................................... 11,200 10,451 9,864 749 587 O t h e r s....................................................... 207 537 192 (330) 345 T o t a l A s s e t s ............................................... $ 13,014 12,375 11,480 639 895 ^Restated due to the implementation of GASB Statement No. 96, Subscriptions-Based Information Technology Arrangements (SBITAs).
SFPUC Liabilities (DOLLARS IN MILLIONS)
Fiscal Year FY2023
Restated
FY2022^ FY2021
2023-22
$ Change
2022-21
$ Change
C e r t i fi c a t e s o f P a r t i c i p a t i o n..................................$ 129 134 138 (5) (4) C o m m e r c i a l P a p e r s ........................................ 488 625 859 (137) (234) B o n d s .................................................... 7,639 6,987 6,631 652 356 N o t e s .................................................... 350 350 — — 350 S t a t e R e v o l v i n g F u n d L o a n s .................................. 482 424 216 58 208 Water Infrastructure Finance and Innovation Act loans . . . . . . . . . . . 122 — — 122 — O t h e r s .................................................... 951 787 1,134 164 (347) T o t a l L i a b i l i t i e s ......................................... $ 10,161 9,307 8,978 854 329 ^Restated due to the implementation of GASB Statement No. 96, Subscriptions-Based Information Technology Arrangements (SBITAs).
Fiscal year 2023, SFPUC liabilities increased by $854 million or 9%.
The increases included $690 million in outstanding debts due to bonds, WIFIA loans and State loans issuances, and $164 million mainly due to pensions based on actuarial estimates.
Fiscal year 2022, SFPUC liabilities increased by $329 million or 4%.
The increases included $676 million in outstanding debts due to bonds and State revolving fund loans issuances, offset by a decrease of $347 million in other liabilities mainly related to net pension liabilities.
Fiscal year 2023, SFPUC assets increased by $639 million or 5%, mainly due to $749 million additional construction and capital improvements, and $223 million in cash and investments. The increase is offset by decreases of $333 million mainly in receivables from State Water Resources Control Board for various construction projects, and restricted net pension asset based on actuarial estimates.
Fiscal year 2022, SFPUC assets increased by $895 million or 8%, mainly due to $587 million additional construction and capital improvements, $345 million increase in receivables from other government entities and interest income, $25 million higher receivables related to charges for services offset by a decrease of $62 million in cash and investments mainly due higher capital spending and power purchases attributed to volatile and increased pricing in power market.
Annual Report for the Fiscal Year Ended June 30, 2023
14 Financials at a Glance
Definitions
SFPUC By the Numbers (DOLLARS IN MILLIONS, UNLESS OTHERWISE STATED) Water Wastewater Hetchy Water Hetchy Power CleanPowerSF SFPUC Standard & Poor’s Bond Rating . . . . . AA- AA N/A AA N/A N/A M o o d y ’ s I n v e s t o r s S e r v i c e .......... Aa2 Aa2 N/A N/A A2 N/A F i t c h ............................. N/A N/A N/A AA- N/A N/A Current Ratio ...................... 1.90 times 2.01 times 8.06 times 3.86 times 4.66 times 2.38 times Debt Ratio ........................ 91.1% 73.7% 13.4% 45.6% 24.1% 78.1% D e b t S e r v i c e C o v e r a g e ............. 1.85 3.17 N/A 63.29 N/A N/A Average Borrowing Rate1............ 3.30% 2.89% N/A 2.88% N/A N/A 1The SFPUC’s high credit ratings helps to reduce high borrowing costs. Average Borrowing Rate is the weighted average interest rate on outstanding bonds as of 6/30/23.
Total Assets2....................... $ 6,344.0 5,260.7 310.9 941.3 157.9 13,014.3 Deferred Outflows of Resources. . . . .$ 223.3 44.1 12.1 14.8 2.3 296.6 Total Liabilities2..................... $ 5,778.1 3,874.9 41.6 428.9 38.0 10,161.0 Deferred Inflows of Resources. . . . . . .$ 97.2 31.1 7.3 8.8 4.2 148.6 Net Position ....................... $ 692.0 1,398.8 274.1 518.4 118.0 3,001.3 2SFPUC total included elimination of $0.5 million interfund payables and receivables between Wastewater and Hetchy Power.
N u m b e r o f C u s t o m e r A c c o u n t s ...... 177,613 175,680 5 6,238 397,154 756,690 C a p i t a l B u d g e t ..................... $ 111.2 687.2 114.9 66.2 3.7 983.2 Adopted Annual Operating Budget. . . $ 663.7 406.1 95.1 170.9 315.7 1,651.5 • C urrent Ratio: measures the enterprise’s ability to pay short-term obligations with its current assets. It is defined as current assets divided by current liabilities. • De
bt Ratio: measures how much of the enterprise’s
assets are financed by debt. It is defined as total
liabilities divided by total assets.
•
D ebt Service Coverage: measures the enterprise’s
ability to meet both legal and policy-driven revenue
obligations associated with debt. To ensure that the
SFPUC retains financial flexibility for contingencies,
it has adopted and implemented financial policies
that impose higher standards than the bond indenture
minimum debt service coverage requirements of
1.00x (current) and 1.25x (indenture).
Annual Report for the Fiscal Year Ended June 30, 2023
15 Five-Year Comparative
Consolidated Net Position
(DOLLARS IN MILLIONS)
2023
$1,814
$626$11,200
$9,535
$297 $149
$13,311
Total assets & deferred outflows
of resources
$10,310
Total liabilities & deferred inflows
of resources
$3,001
Total net position
Current & other assets
Capital assets net of accumulated
depreciation and amortization
Deferred outflows of resources
Current liabilities
Long-term liabilities
Deferred inflows of resources
Net position
2022^
2020 2019
2021
^Restated due to the implementation of GASB Statement No. 96, Subscriptions-Based Information Technology Arrangements (SBITAs). $1,818
$80
$8,661
$257
$920
$7,278
$10,736 $8,278 $2,458
$1,616
$94
$9,864
$330
$1,387
$7,591
$11,810 $9,072 $2,738
$1,924
$532
$10,451
$288
$1,240
$8,067
$12,663 $9,839 $2,824
$1,616
$82
$9,199
$303
$1,106
$7,228
$11,118 $8,416 $2,702
Annual Report for the Fiscal Year Ended June 30, 2023
16 2019
$1,575
Total Expenses
& Transfers Out
Five-Year Comparative
Revenues and Expenses
(DOLLARS IN MILLIONS)
$1,599
$92 $294
$28 $20
$15 $3
$18
$1,258
Revenues, Transfers in
and Capital Contributions
Charges for services
Interest and investment (loss) income
Rents & concessions
Transfers in and capital contribution
Others
Expenses & Transfers out
Operating expenses
Non-operating expenses
Transfers out
Interest expenses, amortization of
premium, discount, refunding loss
& issuance costs
2023
$1,752
Total Revenues,
Transfer In &
Capital Contribution
$1,303
$1,049
$214
$16
$2
$162
$15
$13
$32
2020
$1,525 $1,281
$1,376
$1,130
$279
$31
$2
$118
$45
$15
($26)
2022^
$1,528 $1,442
$1,259
$1,150
$205
$21
$4
$100
$42
$15
$0
2021
$1,416 $1,380
^Restated due to the implementation of GASB Statement No. 96, Subscriptions-Based Information Technology Arrangements (SBITAs). $1,173
$927
$201
$24
$4
$84
$25
$14
$47
$1,343 $1,156
Cover photo: Ductile Iron Water Main
Replacement, Green infrastructure,
Electric Vehicle Charge San Francisco
Program
Back cover photo: Harry Tracy Water
Treatment Plant-Filters No. 1 to 6,
Ductile Iron Water Main Replacement
Photos by: Robin Scheswohl,
Sabrina Wong
Date of Publication: January 2024
SFPUC Financial Services
525 Golden Gate Avenue, 4th Floor
San Francisco, CA 94102-3220
sfpuc.org
Our mission
To provide our customers with high-quality, efficient and reliable water, power and sewer services in a manner that values environmental and community interests and sustains the
resources entrusted to our care.
Follow Us @MySFPUC